What really drives profitability in your organization? Ever heard the phrase “data doesn’t lie”? It may not lie, but it does not necessarily tell the truth. Here is an example.
Pets R Us puts on an event in an effort to increase adoption rates of abandoned pets. They are excited to have two local celebrities host the event and the turnout is huge! Double the number of attendees from any other event they have had. Success right?! Wrong. Only two pets were adopted, the least amount from any prior event. They were focused on driving the number of attendees, and not the number of adoptions.
Measuring things for the sake of measuring them or measuring the wrong thing like Pets R Us did, is not only a waste of time but a waste of resources, and it happens more often than not. How do you know what to measure? This can be a daunting question for a small company, especially when they are given the answer – You need to set KPIs.
“Not everything that counts can be counted, and not everything that can be counted counts.” Albert Einstein
What is a KPI? KPI stands for Key performance indicator and refers to a set of quantifiable measurements used to gauge a company’s overall long-term performance.
Yep, sounds overwhelming – but it doesn’t have to be. There is a difference on what can be measured and what should be measured. Start by identifying areas of improvement, priorities, or growth. What areas are critical to the success of your company? They need to be easily accessible and easy to measure. Less is more – too much data is overwhelming – what data is most impactful today?
What areas of the company do you want to target?
- Want to turn existing customers into repeat customers? Develop a Customer KPI.
- Want to understand high employee turnover rate? Develop an Operational KPI.
- Want to understand the profitability of your company? Develop a Financial KPI.
- Want to know your conversion rate from a marketing campaign? Develop a Marketing KPI.
- Want to know your lead conversion rate? Develop a Sales KPI.
Once you have set your 3-5 KPIs, determine how often they will be reported, who is accountable for reporting them, and to whom will they be distributed. Transparency will result in laser focus and your team all rowing in the same direction.
Not sure where to start? Let’s have a conversation so I can help.
Email me at letsgo@tamaraknappadvisory.com.
Tamara Knapp Advisory LLC
Based in Novi, Michigan
Serving both startups and established clients.
Office: (248) 301-9699
Email: letsgo@tamaraknappadvisory.com
